We need to borrow more, FG says

The Federal Government of Nigeria has announced that the proposed 2022 budget deficit of N6.258 trillion will be financed by borrowing.

This was disclosed by the Minister of Finance, Budget and National Planning, Zainab Ahmed, during a press conference after the Federal Executive Council (FEC) meeting in Abuja on Wednesday.

She said that the government needs to borrow more in order to fund the infrastructure projects in the country

According to her, the revenue generated by the country has been increasing, it is barely sufficient to cover the government’s operational cost and salaries, therefore, it is imperative to borrow in order to finance developmental projects in the country.

The minister said that although there has been concerns regarding Nigeria’s borrowing over the years, it is not new and still within healthy and sustainable limits. She also said that when compared to some countries, Nigeria’s borrowing is quite low.

“Government has been borrowing before this administration and continues to borrow and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power and water for sustainable development in this country,” she said.

“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.”

“Nigeria’s borrowing, has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits”.

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“As of July 2021, the total borrowing is 23% of GDP. When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola.

“We do have a problem with revenue. Our revenues have been increasing. We just reported to Council that our revenues from non-oil have performed, as of July, at the rate of 111%, which means outperforming the prorated budget,” she said.